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Dieselgate II? Fiat Chrysler Accused of Cheating by EPA

We talked about this on the air last Saturday, but the details are now becoming clearer. The 3.0-liter EcoDiesel engine available in the Jeep Grand Cherokee and Ram 1500 has been operating under investigation since at least last fall, when the EPA began looking into emissions issues linked to software devices installed in the vehicles.

In a worst-case scenario, Fiat Chrysler could face a potential fine that could equal a third of FCA’s total market value, roughly $4.62 billion.

Last week, the EPA and the California Air Resources Board served FCA with violation notices. Both agencies claim the automaker failed to disclose software that changes the way the emissions system operates. The software, which could have possibly been deemed permissible if it had been disclosed, is in the EcoDiesel engine available in 2014-16 model-year Jeep Grand Cherokee SUVs and Ram 1500 pickups.

The emissions control software in both vehicles contains at least eight illegal auxiliary emissions control devices, or AECDs, according to the EPA and CARB.

However, Fiat Chrysler CEO Sergio Marchionne adamantly denied that the automaker’s engineers intentionally installed the AECDs to skirt emissions laws. “Our conscience is completely clear. There is no malfeasance inside of Chrysler,” he told CNBC.

The EPA says 103,828 diesel-powered Jeeps and Ram pickups are affected. No 2017 model-year diesel-powered Grand Cherokee or Rams for the U.S. market have been built, according to sources at both plants, as the EPA has not certified the engine.I have had many callers wonder why there were no 2017 models available, and now we know why.

Marchionne told CNBC that engineers have software that will “cure all of the EPA’s concerns.”

Even if the devices can be upgraded, it’s a mystery as to why FCA did not disclose their existence from the beginning, as required. AECDs are permitted in limited circumstances, and automakers must disclose them when they apply for each vehicle’s certificate of compliance. The EPA and CARB allow AECDs only if they protect the engine from damage such as overheating.

“Failing to disclose software that affects emissions in a vehicle’s engine is a serious violation of the law, which can result in harmful pollution in the air we breathe,” Cynthia Giles, assistant administrator of the EPA’s office of enforcement and compliance assurance, said in a statement.

One huge difference between this scandal and the one involving VW is FCA has admitted the software is there since the EPA discovered it. VW, until last September, denied the software existed in its vehicles, which we now know was not true.

The EPA says it discovered Grand Cherokees and Rams were emitting too much NOx during a test known as US06, which measures tailpipe emissions after high-speed highway runs that top out at about 80 mph. The tests also measure emissions during aggressive driving and rapid speed fluctuations.

AutoPacific Analyst Dave Sullivan says any number of factors could be responsible for the excess emissions, according to trade magazine Automotive News.

“We don’t know the conditions that have to be present for the excess emissions to be triggered. Is it weather? It is winter fuel? Is it summer fuel? Is it towing? Was there some defective hardware from a supplier? We don’t know, and it is way too early to say,” said Sullivan.

FCA CEO Marchionne, never at a loss for words, issued a strong statement.

He said the EPA and the company could have settled the issue in “a more efficient way” without the EPA announcement, and he said “I’m really pissed off” about reports that compares FCA’s issues with VW’s.

“The way that it has been described, I think, has been unfair to FCA,” Marchionne said. “That is the thing that disturbs me most. There’s not a guy in this company who would try something as stupid as” cheating on diesel tests. We don’t belong to a class of criminals.”

We had a number of callers on the Car Pro Show last weekend wanting my advice on what to do.For now, I would say nothing.Like in the case of the VWs, it has no bearing on longevity of the diesel engines, so stay tuned to the show and the newsletter, when we know more, I’ll let everyone know.

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